International Organization of Masters, Mates & Pilots, ILA, AFL-CIO v. NLRB

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 14, 2022 Decided March 3, 2023
No. 21-1249
INTERNATIONAL ORGANIZATION OF MASTERS, MATES &
PILOTS, ILA, AFL-CIO,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
SUNRISE OPERATIONS, LLC,
INTERVENOR
On Petition for Review of an Order
of the National Labor Relations Board
Lisa C. Demidovich argued the cause for petitioner. With
her on the briefs were Jason Wojciechowski and Luke Taylor.
Catherine L. Fisk was on the brief for amici curiae Labor
Law Professors in support of petitioner.
Kellie Isbell, Senior Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the brief
were Jennifer A. Abruzzo, General Counsel, Ruth E. Burdick,
Deputy Associate General Counsel, David Habenstreit,
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Assistant General Counsel, and Elizabeth Heaney, Supervisory
Attorney.
Kara E. Cooper argued the cause for intervenor Sunrise
Operations, LLC in support of respondent. With her on the
brief was William G. Miossi.
Before: HENDERSON and PILLARD, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
EDWARDS, Senior Circuit Judge: Since 1981, the
International Organization of Masters, Mates & Pilots, ILA,
AFL-CIO (“the Union” or “IOM”), has been the lawful
bargaining agent for the Licensed Deck Officers (“LDOs”) on
four container ships that carry goods between ports in
California and Hawaii. The LDOs are licensed by the Coast
Guard and they include a master, first (or “chief”), second, and
third officers (also called “mates”) on each of the four ships.
For four decades, the Union has negotiated with a series of
successor companies that have owned the vessels to reach
collective bargaining agreements covering the LDOs. In 2015,
The Pasha Group purchased the ships, and its wholly owned
subsidiary, Sunrise Operations, LLC (“Sunrise”), now operates
the vessels and is the most recent successor employer of the
LDOs.
In 2017 and 2018, the Union sought information from
Sunrise regarding the LDOs on the four vessels. Sunrise
refused to provide the information sought by the Union and
then refused to participate in arbitration at the Union’s
headquarters in Maryland, as required by the parties’ collective
bargaining agreement. The Union filed unfair labor practice
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(“ulp”) charges with the National Labor Relations Board
(“Board” or “NLRB”). The Board’s General Counsel then filed
a complaint alleging that Sunrise had violated sections 8(a)(1)
and 8(a)(5) of the National Labor Relations Act (“NLRA” or
“Act”), 29 U.S.C. § 158(a)(1), (5), when it failed to provide
information to the Union and declined to participate in
arbitration proceedings in Maryland.
A hearing on the ulp charges was held before an
Administrative Law Judge (“ALJ”). The judge found, inter
alia, that the Union was the LDOs’ exclusive bargaining
representative; that Sunrise had admitted that it recognized the
Union as such, as had three predecessor employers who owned
the vessels before Pasha and Sunshine; and that because the
LDOs who were second and third mates were employees, not
supervisors under Section 2(11) of the NLRA, 29 U.S.C. §
152(11), the LDOs’ bargaining unit was an appropriate
“mixed” unit of statutory employees and supervisors. The ALJ
thus rejected Sunrise’s claim that it had no duty to bargain with
the Union under Section 8(a)(5) of the NLRA because the LDO
unit consisted entirely of supervisors. Given that Sunrise and
its predecessors had recognized and bargained with the Union
on behalf of the LDOs, and that the Union retained majority
support among the bargaining unit employees, the ALJ
concluded that Sunrise had violated the NLRA by refusing to
provide the Union with the information that it had sought and
by failing to abide by an agreement requiring the parties to meet
for arbitration proceedings in Maryland.
Sunrise filed exceptions with the NLRB to contest the
ALJ’s decision. The employer’s principal argument before the
ALJ was that all of the LDOs were in fact supervisors and,
therefore, the LDOs did not constitute an appropriate
bargaining unit under the Act. Sunrise pressed this same
argument in its exceptions to the Board. A 2-1 majority of the
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Board ruled against the Union, but it never addressed the issue
raised by Sunrise, i.e., whether the Board lacked jurisdiction
because all of the LDOs were in fact supervisors. Instead, the
Board majority held that it had no jurisdiction to hear the case
because, as the Board saw it, Sunrise believed that all of the
LDOs were supervisors. In the majority’s view, it did not
matter whether, as the ALJ found, the second and third mates
were not supervisors. According to the majority, what mattered
was that when Sunrise and its predecessors voluntarily
recognized the Union as the unit’s bargaining representative,
they did not believe that the LDO unit was a “mixed” unit.
It is clear that the majority opinion for the Board purports
to decide this case without regard to the parties’ principal
claims presented to the ALJ, and it rests on a position that was
never advanced by Sunrise either before the ALJ or in its
exceptions to the Board. Sunrise never argued that the
disposition of this case should turn on the employer’s
subjective beliefs about whether the LDOs were supervisors.
And we can find no case in which the Board or a reviewing
court has held that an employer’s unannounced beliefs about
workers’ supervisory status determines whether the Board has
jurisdiction to enforce the NLRA.
For the reasons explained below, we find that the Board’s
holding in this case lacks support in the record, defies
established law, and creates a new rule without reasoned
justification. It thus fails substantial evidence review and is
arbitrary and capricious for want of reasoned decision making.
We therefore grant the petition for review, vacate the Board’s
decision, and remand the case for reconsideration consistent
with this opinion.
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I. BACKGROUND
A. Statutory and Regulatory Background
Under the NLRA, labor organizations like IOM “can
achieve the status of a majority collective bargaining
representative through either Board certification or voluntary
recognition by the employer[.]” Raymond F. Kravis Ctr. for
Performing Arts, Inc. v. NLRB, 550 F.3d 1183, 1188 (D.C. Cir.
2008). Section 8(d) of the Act requires an employer and a
recognized union representative “to meet at reasonable times
and confer in good faith with respect to wages, hours, and other
terms and conditions of employment, or the negotiation of an
agreement, or any question arising thereunder, and the
execution of a written contract incorporating any agreement
reached if requested by either party.” 29 U.S.C. § 158(d). This
means that the employer and the union bargaining agent have
a mutual obligation to “confer in good faith with respect to any
question arising under [the parties’ collective bargaining
agreement].” NLRB v. Acme Indus. Co., 385 U.S. 432, 436-37
(1967) (cleaned up). The duty to bargain also requires an
employer to provide information that is needed by a recognized
union for the proper performance of its duties as the
employees’ bargaining agent. Id. at 435-36.
A “supervisor” is not an “employee” entitled to
protection under the NLRA. 29 U.S.C. § 152(3) (excluding
“supervisor[s]” from definition of employee). Statutory
supervisors are those with authority to act “in the interest of the
employer” to carry out or “effectively to recommend” at least
one of twelve enumerated activities, provided that the exercise
of that authority requires “the use of independent
judgment.” 29 U.S.C. § 152(11); see NLRB v. Health Care &
Ret. Corp., 511 U.S. 571, 573-74 (1994). The twelve activities
are: “to hire, transfer, suspend, lay off, recall, promote,
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discharge, assign, reward, or discipline other employees, or
responsibly to direct them, or to adjust their grievances, or
effectively to recommend such action.” 29 U.S.C. § 152(11).
The Board looks beyond mere labels or job descriptions to
determine supervisory status. See, e.g., G4S Regulated Sec.
Sols, 362 NLRB 1072, 1073, 1074 n.9 (2015); Dole Fresh
Vegetables, Inc., 339 NLRB 785, 785 (2003). And the party
asserting supervisory status bears the burden of proof on the
point. See NLRB v. Ky. River Cmty. Care, Inc., 532 U.S. 706,
710-12 (2001).
B. The Parties’ Dispute
In 1981, the Union on behalf of the LDOs who were
working aboard the four container ships signed a collective
bargaining agreement (“CBA”) with one of the companies that
was a predecessor to Sunrise. The CBA describes LDOs as
follows:
The Master is the [LDO] in command of the vessel at
all times, subject to the lawful directives of the
Company.
The Chief Officer is the Head of the Deck Department
and as such, performs supervisory duties outlined in
this agreement. In addition, he performs the duties of
the Master as necessary in the Master’s absence.
The Second Officer is the Navigating Officer and,
subject to the direction of the Master, is in charge of all
navigational equipment, and is responsible for
maintaining charts, publications, and navigational
equipment, in accordance with all pertinent navigation
regulations and statutes . . . .
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The Third Officers stand a regular navigation watch at
sea and assist in the normal operation of the vessel as
directed by the Department Head.
Joint Appendix (“J.A.”) 369. The CBA explains, inter alia, that
“[t]he Parties agree that the duties of the [LDOs] . . . shall be
maintained as supervisory and professional” and notes that
LDOs are tasked with “the shipboard supervision” of certain
maintenance and cargo activity. J.A. 369, 370.
The Pasha Group purchased the four ships in 2015,
retaining a majority of the Union-represented LDOs who were
employed aboard the ships. The Pasha Group assured the
Union that it would assume and abide by the 1981 CBA and
recognize the Union as the LDOs’ exclusive bargaining
representative. It agreed that it would “not engage in activities
. . . calculated to undermine” the Union’s status. J.A. 362.
Although the employer has been variously described as The
Pasha Group, Pasha Hawaii, SR Holdings, and Sunrise, the
Union has routinely interacted with Sunrise. The ulp complaint
in this case asserts that Sunrise violated the NLRA by failing
or refusing to provide information to the Union, by delaying
the provision of such information, and by repudiating a CBA
provision that required arbitration to occur in Maryland.
Petitioner’s Br. 1-2, 9. And Sunrise has entered an appearance
as Intervenor before this court (as the employer of the LDOs).
C. Proceedings Before the ALJ
In response to the complaint filed by the Board’s General
Counsel, Sunrise raised several affirmative defenses. None of
the defenses rested on a claim that Sunrise or its predecessors
always believed that the LDOs in the bargaining unit included
only supervisors. Rather, Sunrise’s principal claim was that the
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Board lacked jurisdiction over this case because all of the
LDOs in the bargaining unit are in fact supervisors. The NLRB
General Counsel and the Union countered that “the second and
third mate officers are employees, not supervisors under
Section 2(11).” J.A. 41 (emphasis added). A second and third
mate testified that they did not perform any NLRA Section
2(11) supervisory functions for Sunrise. J.A. 202-11, 227-32.
And Counsel for the Union testified that the Union had never
stipulated to the supervisory status of all LDOs in any of the
approximately 50 ulp charges it had filed in the last two
decades. J.A. 95-96.
The ALJ conducted a fact-intensive inquiry – including an
assessment of disciplinary records, on-board technological
advancements that had routinized the roles of second and third
mates, and other evidence – and found that the LDOs comprise
a mixed unit of statutory employees and supervisors. Sunrise
had not been compelled by law to recognize the mixed unit, but
the ALJ found that it was clear from the record that Sunrise
opted to do so. Accordingly, the ALJ concluded that the NLRB
had jurisdiction over the case. The ALJ additionally held that
Sunrise violated the NLRA by refusing to timely provide
relevant information to the Union, and by refusing to meet in
Maryland for arbitration proceedings as required by the parties’
CBA.
The ALJ also offered detailed responses to each of
Sunrise’s allegations regarding the supervisory status of second
and third mates. First, the ALJ rejected Sunrise’s claims that
certain LDO responsibilities transform all LDOs into
supervisors. Sunrise had argued that second and third mates are
supervisors “by law” when they serve as Officers of the Watch,
referring to a role outlined by the International Safety
Management Code. The ALJ disagreed, finding that in this
role, second and third mates’ “use of independent judgment and
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discretion is circumscribed by the master’s standing orders, and
the Operating Regulations[.]’” J.A. 41 (quoting Chevron
Shipping Co., 317 NLRB 379, 381 (1995)). More broadly, the
ALJ found that in carrying out each of their responsibilities,
second and third mates must: “(1) follow the Master’s
established orders or seek clarification from the superior on
duty on handling any particular situation, or (2) adhere to the
established protocols found in [Sunrise’s] Safety Management
Administration policies.” J.A. 41. In no role did the second and
third mates perform “any supervisory functions as set forth in
Section 2(11) of the [NLRA]” over other employees. J.A. 42.
Second, the ALJ rejected Sunrise’s claim that all LDOs
evaluate unlicensed crew. The ALJ found that Sunrise failed to
proffer a single example of second and third mates asserting
disciplinary responsibilities over unlicensed crew. For
instance, the ALJ found no proof in the record that second and
third mates ever issued disciplinary letters to other employees.
The ALJ concluded that none of the responsibilities of second
and third mates in their relationships with unlicensed crew
required independent judgment or satisfied other indicia of
supervisory status.
Third, the ALJ rejected the testimony of a Sunrise Officer
as to his knowledge regarding whether Sunrise’s LDOs were
supervisors. The ALJ tellingly said: “I accord [the officer’s]
testimony very little weight since it constitutes mainly opinion
evidence. In fact, [he] has no independent or expert knowledge
regarding the supervisory status of [Sunrise’s] LDOs much less
Section 2(11)’s standards for evaluating one’s supervisory
status. Simply put, [Sunrise] has failed to show that its LDOs
are supervisors under the Act.” J.A. 42.
In sum, the ALJ concluded that Sunrise failed to meet its
“burden of proving [all LDOs’] supervisory status,” J.A. 41.
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Instead, the ALJ found that “the evidence clearly shows that
[Sunrise]’s second and third mate officers perform duties that
are routine in nature and do not perform any supervisory
functions as set forth in Section 2(11) of the Act.” J.A. 42. As
explained below, the Board did not dispute any of the ALJ’s
findings.
Finally, the ALJ rejected Sunrise’s argument that the
Board lacked jurisdiction over this case because the Union was
never certified by the NLRB as the exclusive bargaining
representative of the LDOs. The ALJ properly noted that
certification is not the only way to prove majority-support
status. J.A. 42 (citing Barrington Plaza & Tragniew, Inc., 185
NLRB 962, 963 (1970), enforced in part, 470 F.2d 669 (9th
Cir. 1972). The ALJ explained that:
The issue . . . is not whether the unit is appropriate or
whether the Board could have initially certified the unit
under the Act. . . . Rather, it is whether the employer
voluntarily agreed to recognize . . . a “mixed” unit. . . .
[W]here an employer has consented to a bargaining
unit that includes supervisors, the [Board] properly
may find the employer guilty of an unfair labor practice
with respect to that bargaining unit. . . . It is undisputed
that [Sunrise] voluntarily recognized the Union as the
exclusive bargaining representative of the LDOs on the
four vessels. . . . [T]he 1981 collective-bargaining
agreement (as modified by successive [agreements])
remained in force when [Sunrise] acquired the vessels,
and George Pasha assured the Union that [Sunrise]
would assume and abide by the collective-bargaining
agreement.
J.A. 25-26 (citations omitted).
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Notably, Sunrise never argued to the ALJ, nor did it offer
evidence to support any claim that either it or the predecessor
employers always believed that the LDOs constituted a
supervisors-only unit.
D. Sunrise’s Exceptions to the Board
Sunrise filed exceptions to the ALJ’s decision, claiming
for the first time that “[t]here is no dispute that since at least
1981, the parties’ collective bargaining agreement
unambiguously states the parties’ mutual intent and
understanding that the [LDO]s—including the Second and
Third Mates—are statutory Supervisors.” Petitioner’s Br. 18
(citation omitted) (emphasis added). However, Sunrise did not
argue that any subjective understanding that Sunrise or its
predecessors may have had about the supervisory status of the
LDO unit would, in and of itself, strip the Board of jurisdiction
over the case.
In response to Sunrise’s exceptions, the Union contended
that the parties had never agreed that LDOs were part of an all-
supervisors unit. Id.E. The Findings of the Board Majority
In response to Sunrise’s exceptions, a two-member
majority of the Board determined that it “need not engage in an
analysis of whether individuals in the several LDO
classifications possess any of the supervisory indicia
enumerated in Section 2(11) of the [NLRA].” J.A. 5. The
majority accepted the ALJ’s findings that Sunrise had
recognized the Union, agreed to the CBA, and refused to
provide information or arbitrate pursuant to the terms of the
CBA. The majority did not dispute the ALJ’s factual findings
that the second and third mates are in fact employees, not
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statutory supervisors. And the majority did not contest the
settled law that an employer is bound by its voluntary
recognition of a mixed unit of employees and supervisors. The
majority simply dismissed the complaint without passing on
the merits of the ulp charges, ruling that because Sunrise
always believed that the bargaining unit consisted only of
statutory supervisors, it had no duty to bargain with the Union.
The majority held that Sunrise’s apparent belief stripped the
Board of jurisdiction over the case.
Pointing to the majority opinion’s lack of any “support in
the [NLRA] or its policies, in Board or judicial precedent, or in
the record in this case,” the dissenting member of the Board
predicted the majority’s decision would “sink” on judicial
review. J.A. 6, 11. The Union now petitions for review.
II. ANALYSIS
A. Standard of Review
“Judicial review of NLRB determinations in unfair labor
practice cases is generally limited, but not so deferential that
the court will merely act as a rubber stamp for the Board's
conclusions. Board orders will not survive review when the
Board's decision has no reasonable basis in law or when the
Board has failed to apply the proper legal standard. A Board's
decision will also be set aside when it departs from established
precedent without reasoned justification or when the Board's
factual determinations are not supported by substantial
evidence.” Titanium Metals Corp. v. NLRB, 392 F.3d 439, 445-
46 (D.C. Cir. 2004) (cleaned up); see also Hawaiian Dredging
Constr. Co., Inc. v. NLRB, 857 F.3d 877, 881 (D.C. Cir. 2017).
Substantial evidence “‘means such relevant evidence as a
reasonable mind might accept as adequate to support a
13
conclusion.’” Micro Pac. Dev. Inc. v. NLRB, 178 F.3d 1325,
1329 (D.C. Cir. 1999) (citation omitted). We are obligated to
assess the “‘whole record,’” including “‘whatever in the record
fairly detracts from’” the NLRB’s decision. Tenneco Auto., Inc.
v. NLRB, 716 F.3d 640, 647 (D.C. Cir. 2013) (quoting
Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951)).
Furthermore, “judicial deference is not warranted where
the Board fails to adequately explain its reasoning, or where the
Board leaves critical gaps in its reasoning.” David Saxe Prods.,
LLC v. NLRB, 888 F.3d 1305, 1311 (D.C. Cir. 2018) (cleaned
up). When the Board fails to explain or acknowledge its
deviation from established precedent, we vacate its decision as
arbitrary and capricious. See Manhattan Ctr. Studios, Inc., v.
NLRB, 452 F.3d 813, 816 (D.C. Cir. 2006).
B. The Board Erred in Purporting to Decide an
Issue That Was Never Raised With the ALJ
“It is a basic tenet of administrative law that each party to
a formal adjudication must have a full and fair opportunity to
litigate the issues to be decided by the agency,” Trident
Seafoods, Inc. v. NLRB, 101 F.3d 111, 116 (D.C. Cir. 1996),
because otherwise, “the record developed with regard to that
issue will usually be inadequate to support a substantive
finding in [the proponent’s] favor,” id. The law is clear that
“notice adequate to provide a fair opportunity to defend on [an]
issue” must “occur[] before the record is closed,” and that the
Board generally should not consider significant issues that the
parties failed to raise. Id.; see Collective Concrete, Inc. v.
NLRB, 786 F. App’x 266, 267 (D.C. Cir. 2019) (declining to
review issues not presented to the ALJ); Chicago Local No.
458-3M v. NLRB, 206 F.3d 22, 24 n.1 (D.C. Cir. 2000) (an issue
that “the parties did not litigate . . . before the ALJ” was “not
properly before the court”).
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Here, Sunrise alleged that all LDOs are in fact supervisors.
As explained above, the ALJ reviewed the record and
concluded that second and third mates are in fact statutory
employees, not supervisors. The Board disregarded Sunrise’s
allegations, ignored the ALJ’s principal findings, and gave no
heed to controlling precedent in purporting to hold that it
lacked jurisdiction because Sunrise believed it had consented
to a unit “consisting entirely of supervisors excluded from
coverage under the [NLRA].” J.A. 5. Neither the litigants nor
the ALJ were on notice that the Board would focus on this
issue. More fundamentally, no party had the opportunity to
present evidence before the ALJ regarding Sunrise’s beliefs,
and the ALJ never considered the matter. The greatest irony is
that the Board majority either accepted as accurate the ALJ’s
findings or did not dispute any of the ALJ’s principal
conclusions.
When the Board majority departed from the case that had
been presented to the ALJ and focused instead on a significant
issue that had never been raised before the ALJ, it arbitrarily
and inexcusably denied the parties a full and fair opportunity
to be heard on the merits of the ulp charges. This alone is
grounds to reverse the Board decision. There is more, however.
C. The Board Created a New Rule That Lacks
Reasoned Justification
Beyond disregarding the case presented to the ALJ, the
Board majority decided this case based on a rule untethered to
established law, the parties’ claims, and the record. Neither the
Board nor any reviewing court has ever found that an
employer’s unannounced belief about the supervisory status of
employees determines the Board’s jurisdiction. If anything,
Board precedent suggests the opposite. See Gratiot Cmty.
15
Hosp., 312 NLRB 1075, 1075 n.2 (1993); Arizona Elec. Power
Coop., Inc., 250 NLRB 1132, 1133-34 (1980). And nothing in
the NLRA instructs the Board to consider parties’ beliefs as
part of its jurisdictional analysis. Furthermore, what the Board
majority surmised that Sunrise believed is not what Sunrise
argued that it believed before the ALJ. Indeed, Sunrise did not
make any arguments before the ALJ about its subjective
beliefs. In particular, it never argued before the ALJ or the
Board that its subjective beliefs should play a dispositive role
in the Board’s jurisdictional analysis. Therefore, the Board
effectively decided this case not only on a new rule of law but
on a position never fathomed by the ALJ or the parties.
While “[a]gencies are free to change their existing
policies,” they must “provide a reasoned explanation for the
change.” Encino Motorcars, LLC v. Navarro, 579 U.S. 211,
221 (2016); see NLRB v. CNN Am., Inc., 865 F.3d 740, 748
(D.C. Cir. 2017) (declining to enforce a Board order that
“appear[ed] to be inconsistent with its precedents, without
addressing those precedents or explaining why they do not
govern”); see also Dupuy v. NLRB, 806 F.3d 556, 562 (D.C.
Cir. 2015). The explanation “must at least display awareness
that [the Board] is changing position and show that there are
good reasons for the new policy.” Encino Motorcars, 579 U.S.
at 221 (cleaned up); see FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009). And it must acknowledge that
“longstanding policies may have engendered serious reliance
interests that must be taken into account,” as failure to do so
renders the new rule arbitrary and capricious. Dep’t of
Homeland Security v. Regents of Univ. of Calif., 140 S. Ct.
1891, 1913 (2020) (cleaned up).
Under the Board’s new rule, employees may lose the
protections of the NLRA not because they are in fact uncovered
by the Act, but because their employer asserts a belief that they
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are supervisors. Although the ALJ found, and the Board did not
dispute, that the second and third mates are in fact employees
covered by the NLRA, the Board majority found that the LDOs
have no enforceable rights under the NLRA to be free from
ulps simply because some members of the Board assumed that
the employer always believed that all LDOs were supervisors.
Apart from finding no support in established law, the rule
makes little sense. If allowed to stand, the Board’s new rule
might easily destabilize established bargaining relationships
and encourage unseemly strategic litigation. The rule
propounded in the majority opinion would allow any employer
or union to challenge the jurisdiction of the Board (and thereby
aim to deny employees their rights under the Act) simply by
asserting that company or union representatives believed all
workers in the bargaining unit did not meet the statutory
definition of an “employee.”
The Board adopted its new rule with no regard for the
parties’ reliance interests. The Board did not consider the
sweeping impact of its new rule or explain why existing case
law does not govern. It did not acknowledge – much less justify
– its adoption of a new rule, and it afforded the affected parties
no opportunity to address it or offer relevant evidence. Thus,
we are left with no choice but to vacate the Board’s arbitrary
and capricious decision for want of reasoned decision making.
D. The ALJ’s Findings of Fact Are Uncontested
and Thus Dispositive
There can be no doubt that determining supervisory status
requires a heavily fact-intensive analysis of the record to
determine actual, not believed, exercises of authority. See
Jochims v. NLRB, 480 F.3d 1161, 1168 (D.C. Cir. 2007). As
discussed above, after meticulously reviewing disciplinary
records, testimony, and other evidence, the ALJ found that
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second and third mates are in fact statutory employees because
they “have no authority to hire/fire, discipline or recommend
discipline, transfer, lay off, promote or suspend, schedule,
reschedule, recall or assign any LDOs.” J.A. 41. The ALJ
found that Sunrise voluntarily agreed to bargain with the Union
as the LDOs’ bargaining agent and “admitted that it recognized
the Union as the exclusive collective-bargaining representative
for the LDOs.” J.A. 42. Accordingly, the ALJ reasonably
concluded that the LDOs form an “appropriate bargaining unit”
over which “the Board retains jurisdiction.” J.A. 42.
No party has questioned the ALJ’s finding that the 1981
CBA is still in effect and that the parties voluntarily agreed to
it. Nor has any party attempted to undermine the ALJ’s finding
that Sunrise is an employer within the meaning of NLRA
Section 2(2) and the Union is a labor organization within the
meaning of NLRA Section 2(5). Indeed, the Board itself left
untouched the ALJ’s finding that second and third mates are
employees within the meaning of NLRA Section 2(3). Thus,
on the record before us, the LDO unit is in fact a voluntarily
recognized mixed bargaining unit protected by the NLRA. The
Board’s decision to stray from that record and rest its holding
on what the majority surmised about Sunrise’s beliefs cannot
stand.
E. The Board Majority’s Attempt to Justify Its
Position Cannot Withstand Scrutiny
The Board majority began its analysis by acknowledging
NLRB precedent establishing that an employer has a duty to
bargain with a voluntarily recognized “mixed” bargaining unit.
J.A. 25 (citing Union Plaza Hotel & Casino, 296 NLRB 918(1989), enforced sub nom. E.G. & H. Inc. v. NLRB, 949 F.2d
276 (9th Cir. 1991)). The majority opinion does not question
the controlling law that, after voluntarily recognizing a mixed
18
unit, an employer may neither invoke the mixed nature of the
unit as a defense to any ulp charge, nor assert that the Board
would not have certified the unit in the first place. However,
the majority opinion effectively casts aside this controlling case
law because, in its view, the ALJ failed to “address the
threshold question of what type of unit [Sunrise] voluntarily
recognized.” J.A. 26. It holds that because Sunrise somehow
failed to understand that the LDO unit was mixed, it did not
consent to a mixed unit. In attributing this belief to Sunrise, the
majority presents arguments and offers findings that no party
raised or addressed in the hearing before the ALJ. The
justifications offered to bolster the majority opinion are plainly
specious.
First, the Board majority attempted to ground its
“threshold question” analysis in NLRB precedent. But the sole
case it discussed – Virginia Mason Hospital – provides no
support for its position. 357 NLRB 564 (2011). Virginia Mason
neither discusses parties’ beliefs about workers’ supervisory
status nor suggests that an employer may avoid a present
bargaining obligation by belatedly asserting a mistaken belief
about a bargaining unit’s composition. See generally id.Indeed, we can find no case law, and the Board offers nothing,
suggesting that Sunrise should be excused for its alleged error.
Rather, case precedent is clear that when parties execute a
collective bargaining agreement “with full knowledge of the
nature of the present duties” of all those covered by the
contract, parties are bound by the agreement. Arizona Elec.
Power Coop., 250 NLRB at 1133. Sunrise is charged with
knowledge of the duties of its employees. See id. Sunrise’s
purported mistaken belief does not controvert the evidence in
the record regarding the actual character of LDOs’ work as
employees, not supervisors.
19
The Board majority opinion also asserts that the parties
must have believed all LDOs are supervisors because the text
of the CBA refers to LDOs’ duties as “supervisory.” J.A. 26.
But case precedent makes clear that merely labelling a position
supervisory does not transform an employee into a supervisor
for the purposes of the NLRA. See Oakwood Healthcare, Inc.,
348 NLRB 686, 688, 690 n.24 (2006). “Job descriptions, job
titles, and similar paper authority, without more, do not
demonstrate supervisory authority.” G4S Regulated Sec. Sols.,
362 NLRB at 1072-73 (cleaned up). Contrary to the majority
opinion, the Board was not free to ignore its duty to engage in
a fact-intensive analysis to determine the actual status of
second and third mates, and these employees are not
“supervisors” merely because the CBA uses the term
descriptively. Notably, the CBA does not state that the parties
intended for the LDOs to be treated as statutory supervisors
under Section 2(11) of the Act, nor does it recite or refer to the
statutory criteria for determining supervisory status. And there
is nothing in the record to suggest that Sunrise said or did
anything that would have put the Union on notice that Sunrise
supposedly believed that the unit consisted only of statutory
supervisors and that the parties’ relationship was not governed
by the NLRA.
The Board majority opinion also surmises that the parties’
collective bargaining relationship must have always existed
“outside the aegis of the [NLRA],” based on three findings: (1)
the Union had not, until now, “invok[ed] the [NLRA] or
involv[ed] the Board” in the parties’ 40-year relationship, J.A.
26; (2) federal courts in the 1970s and ‘80s found – and the
Union itself once argued – that all LDOs are supervisors, J.A.
26 & n.7, 27; and (3) the Union was never certified under the
NLRA. These arguments are unpersuasive.
20
First, as amici explain, “the absence of Board charges
could be evidence that a collective bargaining relationship is
working as the statute intended rather than that the union
believed the workers have no statutory rights.” Amicus Br. 18.
In other words, a lack of ulp charges or other NLRB
involvement does not prove that the NLRA is inapplicable.
Second, the supervisory status of LDOs aboard ships in the
1970s and ‘80s is irrelevant here, where the ALJ specifically
found – based on the record in this case – that some LDOs are
employees. And even if the facts of the cited cases had any
bearing here, the Board majority inexplicably ignored
countervailing evidence that technological advances in the last
several decades have transformed the roles of LDOs.
Third, the law is clear that an employer is bound by its
acceptance of a labor agreement for a mixed unit even if the
unit is one that the NLRB would not have certified in a Board-
conducted election. See Loomis Armored US, Inc., 364 NLRB
No. 23 (2016). Employers seeking to renege on bargaining
obligations cannot simply point out that a Section 9 election
never occurred; instead, they must establish a good faith
reasonable doubt about the union’s continuing majority
support. Allentown Mack Sales and Serv., Inc. v. NLRB, 522
U.S. 359, 364, 372 (1998). This is true where, as here, the
employer assumed a CBA as a successor employer. See Fall
River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 44
(1987).
The majority opinion also suggests that the “practicalities
of operating large vessels on the open seas” lends support to its
finding that Sunrise only “consented to a supervisory unit.”
J.A. 26. The opinion notes, for example, that the LDOs worked
and slept separately from unlicensed crewmembers. J.A. 26.
However, the majority’s reliance on cherry-picked practices is
21
based on its erroneous conflation of maritime practices and
labor law. Pointing to crewmembers’ sleeping arrangements –
or even pointing to authority they may have wielded “to
demand obedience” from other officers – simply “doesn’t
answer the questions posed by the 2(11) indicia of supervisory
status.” Brusco Tug & Barge, 359 NLRB 486, 493 (2012), aff’d
696 F. App’x 519 (D.C. Cir. 2017).
Finally, it is worth noting that it is implausible to imagine
that Sunrise would not have adopted the same position as the
Board majority if the employer thought there was any truth to
the claim that it always believed that the LDO unit consisted of
only supervisors. If Sunrise had truly believed that all LDOs
aboard its own ships were supervisors and thought this belief
was a significant consideration, we assume that Sunrise would
have tried to press the point before the ALJ. It did not. Rather,
Sunrise claimed only that the LDOs are in fact supervisors, a
position that not even the Board majority opinion embraces.
III. CONCLUSION
On the record before us, we find that the Board’s position,
as reflected in the Board majority opinion, lacks support in the
record, defies established law, and creates a new rule without
reasoned justification. It therefore fails substantial evidence
review and is arbitrary and capricious for want of reasoned
decision making. We also find that the arguments advanced by
Sunrise find no support in the record or in controlling
precedent. We therefore grant the petition for review, vacate
the Board’s decision, and remand the case for reconsideration
consistent with this opinion.
So ordered.